UniCredit Unloads Stake in Mediobanca -- WSJ
By Giovanni Legorano and Pietro Lombardi
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (November 8, 2019).
Italy's largest lender, UniCredit SpA, has shed its entire stake
in investment bank Mediobanca SpA, a move that ends a 70-year-plus
relationship and has the potential to shake up the country's
The stake sale was announced late Wednesday. On Thursday,
UniCredit reported sharply higher third-quarter net profit, its
shares rising 6.2% in early trade. Mediobanca shares were down
UniCredit had been a shareholder since Mediobanca's foundation
in postwar Italy. Mediobanca quickly became a cornerstone of
Italian capitalism, accumulating a web of cross-holdings in large
Italian companies and turning it into the country's de facto
corporate puppet master for decades.
UniCredit's exit from the investment could affect Mediobanca's
strategy and cascade through corporate Italy. Mediobanca has been
the architect of many financial and corporate deals in recent years
and holds sway over the strategy of Assicurazioni Generali SpA,
Europe's third-largest insurer, in which it retains a 13% stake.
Generali, in turn, controls hundreds of billions of dollars in
funds and has been an important investor in Italian bonds and
shares, helping Mediobanca deploy its strategy in the country and
providing an important engine for the Italian economy.
Mediobanca has used the proceeds from numerous stake sales in
other companies over recent years to invest in its corporate and
investment banking divisions and retail and wealth-management
units. For instance, it bought a 51% stake in London-based credit
manager Cairn Capital Group Ltd from Royal Bank of Scotland and
other institutional investors and bought Barclays PLC's Italian
Mediobanca declined to comment.
The sale of UniCredit's stake in Mediobanca leaves Leonardo Del
Vecchio, founder of eyewear giant Luxottica, as Mediobanca's
largest investor with a 7.5% stake.
Mr. Del Vecchio has recently criticized Mediobanca's management
in Italian media, saying the bank's results were too reliant on
Generali's stake and on its consumer credit unit Compass, and
calling for a stronger focus on its investment banking
Italian media speculated that the entrepreneur, who increased
his stake in Generali to just under 5%, plans to buy more shares in
Mediobanca. Mr. Del Vecchio's stake could have increased since the
sale by UniCredit, according to a person familiar with the matter,
but not above 10% as that would require authorization by
A representative for Mr. Del Vecchio declined to comment.
Jean-Pierre Mustier, UniCredit's chief executive, declined to
comment Thursday on whether he had contact with Mr. Del Vecchio
regarding the sale of the stake.
The decision to exit Mediobanca was in line with the bank's plan
to shed all its nonstrategic assets, Mr. Mustier said.
"If we didn't have it, would it make sense to buy it now? No,
it's another bank, a competitor," he said.
Unicredit's decision to sell its stake comes at the end of a
three-year strategic plan which saw it shedding assets, including
online bank FinecoBank, asset manager Pioneer and polish lender
Bank Pekao SA. The plan was designed to address an array of
problems, including a capital base that had grown too thin and
difficulties in bolstering its fee-earning businesses. Low interest
rates were also hitting its lending activity and its stock,
Europe's largest, of bad loans.
It raised EUR13 billion ($14.40 billion) of fresh capital, cut
costs and disposed of billions of bad loans.
The bank is set to unveil a new plan in December.
Unicredit's improved financial results had been expected, coming
against a year-ago quarter that was hit by an impairment related to
the lender's stake in Turkish bank Yapi Kredi and provisions.
However, net profit grew more than analysts had forecast.
Net profit for the period was EUR1.10 billion compared with a
profit of EUR29 million a year earlier, the bank said. On an
adjusted basis, which excludes one-offs, net profit rose almost 26%
on year. Revenue rose 1.7% to EUR4.70 billion.
Write to Giovanni Legorano at firstname.lastname@example.org and
Pietro Lombardi at Pietro.Lombardi@dowjones.com
(END) Dow Jones Newswires
November 08, 2019 02:47 ET (07:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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